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By issuing various GST Notifications, various changes have been made applicable w.e.f. 18th July 2022 related to Taxation of Transportation Sector specially for Goods Transport Agencies (GTA) under GST . The same are discussed below:

I. Changes applicable to GTA paying GST under Forward Charge

1. Option to pay GST @5% under Forward Charge (Without ITC)

Currently, GST is applicable on GTA services either at 5% under RCM or 12% with ITC under FCM under CGST Notification (Rate) No. 11/2017 dated 28.06.2017.

Now, GTA Service Providers have been given option to pay GST @5% without ITC. Now, w.e.f. 18th July 2022, following options available to GTA Service Providers for transportation of goods (including used household goods for personal use) –

HSN Category GST Rate
9965 If GTA does not exercise the option to pay  GST i.e., Recipient pays under reverse charge. 5%. Recipient can claim ITC
9965  

If GTA exercise the option to pay GST i.e., under Forward charge.

5% (without ITC) or (w.e.f. 18th July 2022)
9965 12% with ITC)

2. Mandatory Declaration by GTA to its jurisdictional officer for opting for Forward Charge

Where GTA opts to pay GST under forward charge during a financial year, it shall have to give a declaration as specified in Annexure V (Form appended at end of the document) on or before 15th March of the preceding financial year, i.e., say for F.Y. 23-24 such declaration needs to be given on or before 15.03.2023.

GST- Changes related to Transport Sector (GTA)

However, for the F.Y. 2022-23, the option can be exercised on or before 16.08.2022. The various scenarios can be summarized as under:

Option Declaration
RCM Not Applicable
FCM (5% or 12%) To file in Annexure-V on or before 15th March of preceding F.Y. For e.g. for F.Y. 2023-24, to file Declaration on or before 15th March 2023
FCM (5% or 12%) for F.Y .2022-23 On or before 16th August 2022. Invoice can be raised under forward charge for period 18.07.2021 to 16.08.2022 subject to timely filing of Declaration

3. Mandatory Declaration in invoice 

If GTA opts to pay GST under forward charge, then supplier shall issue a tax invoice to the recipient at the applicable rate and shall give following declaration as prescribed in Annexure III of the Notification No. 05/2022-CentraI Tax (Rate) dated 13.07.2022. Such declaration is reproduced below for ready reference.

“Declaration

I/we have taken registration under the CGST Act, 2017 and have exercised the option to   pay tax on services of GTA in relation to transport of goods supplied by us during the Financial Year _________ under forward charge.’

II. Other Changes related to GST on Transport Sector (GTA)

1. Classification of GTA services under 9965

Relevant changes have been made in CGST Notification (Rate) No. 11/2017 dated 28.06.2017. to avoid the confusion in classification of GTA Service whether under HSN 9965 or 9967. Now, GTA services shall be classified under SAC 9965 only, whereas ‘Support services in transport’ shall be classified under SAC 9967. An explanation has been inserted in SAC 9967 to clarify the same – “This entry does not include goods transport service involving Goods Transport Agency (GTA) service, which falls under Heading 9965’’.

It is now mandatory to follow HSN 9965 for GTA services and HSN 9967 no longer applies to GTA services and only to transport services taxable @18%.

2. Withdrawal of exemption in case of GTA services

Exemption has been withdrawn on services provided by GTA in relation to transportation of goods in goods carriage, where consideration charged-

  • on a consignment transported in a single carriage does not exceed Rs.1500/-
  • for transportation of all such goods for a single consignee does not exceed Rs.750/-

3. GST rate on Renting of goods carriage vehicle reduced to 12% 

New Entry No. 10(ia) has been inserted under CGST Notification (Rate) No. 11/2017 dated 28.06.2017. to provide that renting of goods carriage with operators where cost of fuel is included in the consideration shall be liable to GST @12% under the HSN Code 9966 as against earlier GST rate of 18%.

It may be noted hiring to GTA continues to remain exempted as per Entry No. 22 of CGST Notification (Rate) No. 12/2017 dated 28.06.2017

Applicable w.e.f. 6th July 2022

4. Declaration on Tax Invoice where E-Invoicing is not applicable to GTA

Rule 46 of CGST Rules, 2017 has been amended vide CGST Notification No. 14/2022 dated 06.07.2022 to provide that Declaration is required to be added in Tax Invoices being issued by the Supplier for non-applicability of E-Invoice on account of exemption provided in the Rule 48(4) of CGST Rules, 2017.

“I/We hereby declare that though our aggregate turnover in any preceding financial year from 2017-18 onwards is more than the aggregate turnover notified under sub-rule (4) of rule 48, we are not required to prepare an invoice in terms of the provisions of the said sub-rule.” 

In terms of Rule 48(4) read with CGST Notification No. 13/2020 dated 21.03.2020, GTA is exempted from complying with E-Invoicing requirements even if their aggregate turnover exceeds the prescribed threshold of issuing E-Invoice i.e. INR 20 Crores (w.e.f. 1st April 2022). Hence, any GTA having aggregate turnover of more than INR 20 Crores in any F.Y. 2017-18 onwards which is not required to issue E-Invoice will mention the above Declaration while issuing Tax Invoices to the customers.

III. Format of Form for exercising  option by a Goods Transport Agency (GTA) for payment of GST under forward charge

Annexure V

FORM

Form for exercising the option by a Goods Transport Agency (GTA) for payment of GST on the GTA services supplied by him under forward charge before the commencement of any financial year to be submitted before the jurisdictional GST Authority.

Reference No.-

Date: –

1. I/We______________ (name of Person), authorised representative of M/s……………………. have taken registration/have applied for registration and do hereby undertake to pay GST on the GTA services in relation to transportation of goods supplied by us during the financial year……………under forward charge in accordance with section 9(1) of the CGST Act, 2017 and to comply with all the provisions of the CGST Act, 2017 as they apply to a person liable for paying the tax in relation to supply of any goods or services or both;

2. I understand that this option once exercised shall not be allowed to be changed within a period of one year from the date of exercising the option and will remain valid till the end of the financial year for which it is exercised.

Legal Name: –

GSTIN: –

PAN No.

Signature of Authorised representative:

Name of Authorised Signatory:

Full Address of GTA:

(Dated acknowledgment of jurisdictional GST Authority)

Note: The last date for exercising the above option for any financial year is the 15th March of the preceding financial year. The option for the financial year 2022-2023 can be exercised by 16th August, 2022.]

Formulated by: Keshav Maloo & Associates | Chartered Accountants

Author Bio

He is chartered accountant by qualification possessing PQE of 8 years in indirect tax, GST, UAE VAT, corporate finance, business operations, treasury, liaison with Banks & FIs, documentation. At present he is a practicing Chartered Accountant serving clients in Jaipur and Delhi/NCR. His core View Full Profile

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